Vietnam should speed up infrastructure and transportation projects

Vietnam’s National Assembly has called for the faster implementation of the country’s infrastructure and transportation projects in order to avoid the huge cost overruns that have been caused by delays.  

Duong Trung Quoc, National Assembly (NA) member from Dong Nai, said that he is concerned over delays in the construction of the Long Thanh International in Dong Nai province. “Funding for the project is ready, but the people are still waiting for it to be deployed.”

According to Quoc, the National Assembly discussed the project’s feasibility report in May but have not approved the project and that the longer a project is delayed, the more complicated and difficult it will become in terms of budgeting.

The Long Thanh Airport in Dong Nai is set to become Vietnam’s largest airport and is schedule to be built in three phases over a 30-year period. Phase one is scheduled for completion in 2025 and the airport will be able to handle 25 million passengers a year.  

Investment in the first phase is estimated at $4.87 billion USD and will be sourced from the state budget, government bonds and private equity.

Phase two development will be from 2030 to 2035 and phase three development will be from 2040 to 2050. Experts have warned that the construction cost of projects could double every five years and that speeding up the development of approved projects will result in billions of dollars in savings.

Quoc also cited the first metro lines in Hanoi and Ho Chi Minh City are prime examples of delayed transportation projects that have faced multiple delays and become more expensive and are placing greater burdens on the government and taxpayers.

Ho Chi Minh City’s first metro has been delayed due to lack of funds, the same reason given for several earlier delays since construction began in August 2012.

The line runs 20 kilometers (12.43 miles) through five HCMC districts of 1, 2, 9, Binh Thanh and Thu Duc and Di An District in the neighboring province of Binh Duong.

The estimated cost of the line has ballooned from $1.3 billion to more than $2.1 billion, and the city needs to wait for the NA to approve this.

The Cat Linh-Ha Dong metro line in Hanoi has been delayed by more than five-years and seen its original budget increase from $553 million USD to a current estimate of $868 million USD, a 60% increase, that will be funded with $670 million USD in loans from China.

Ho Chi Minh City’s first metro line has been delayed by lack of funds on multiple occasions since 2012. These delays have caused the project budget from $1.3 billion USD in 2012 to $2.1 billion USD in 2017, also an increase of 60%. The city’s other major transportation projects also are looking at similar problems.

Other member of the National Assembly at the meeting said that they’re also concerned with the delays and cost overruns. Nguyen Huu Cau, Public Security Director, Nghe An Province, noted that the Vietnam State Audit Office has reported that 27 of 42 projects of the Ministry of Transport have increased their original budget estimates.

Cau noted that the proposed budget amounts and delays in projects make losses more likely and that the government should monitor projects to keep them on time and within their budgets.

Vietnam has multiple big-budget / large-scale transportation projects in development and in planning, including:

·       The upgrade of 16 civilian airports – approved budget of $2.4 billion USD

·       The North-South Expressway – in discussion / estimated at $12 ~ $13 billion USD

·       The North-South high-speed railway – in discussion / estimated at $56 billion USD